Reference and administrative details

Annual Report and Financial Statements 2014 For the year ended 31 December 2014

Reference and administrative details For the year ended 31 December 2014 Company number 1262100 Registered office and operational address PMI House, 4-10 Artillery Lane London E1 7LS Members of Council (2014/15) President Vice-Presidents Paul Couchman Gerry Degaute Kevin LeGrand Members Lesley Alexander Elizabeth Harvey Geoff Ashton Anne Jones to 01/10/2014 Robert Branagh Fiona McDonagh Richard Butcher Ray Martin Lesley Carline from 01/10/2014 Jane Murray Sara Cook Chris Parrott Sue Curryer Susan Smith Directors The directors who served during the year and up to the date of this report were as follows: Paul Couchman Susan Smith Resigned 10 July 2014 Gerry Degaute Kevin LeGrand Appointed 10 July 2014 Lesley Alexander Appointed 19 November 2014 Robert Branagh Appointed 19 November 2014 Vince Linnane Brian Murkin Principal bankers Auditors HSBC 100 Old Broad Street London EC2N 1BG Sayer Vincent LLP Chartered accountants and statutory auditors Invicta House 108 114 Golden Lane London EC1Y 0TL 2 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

President s report A momentous year awaits At the time of writing (March 2015), we await two momentous events both with a huge significance for the pensions industry. In any normal General Election year, that in itself would be dominating the headlines as various pensions commentators and observers look for clues as to where each political party will be advocating pensions change in their manifestos and what this will mean for the industry. The tax incentives covering UK pensions are under scrutiny from all the parties and whoever gets elected we expect some significant changes around this during the summer. However, a month earlier than the Election date, we see the launch of the Freedom and Choice era on 6 April which heralds unprecedented opportunities (as well as some risks, depending on your perspective) to engage in the most positive ways with the public about what they can choose to do with their retirement pots in this post-annuity requirement world. There are any number of scenarios that might happen the system won t be able to cope with demand from consumers wanting to access their money; it will all be a damp squib when the repercussions of taking your pension out of a tax efficient wrapper are explained; or that the providers are generally either unable or unwilling to offer the new flexibilities (and can t be compelled to do so). On the other hand everything may go swimmingly well and we could all be very pleasantly surprised! As ever, the outcome is likely to be a combination of all of these plus other factors not listed and fudge is likely to be the flavour of the day. the PensionWise service which focuses on decisions in the run up to your 55th birthday (and the right to access your pensions savings). Essentially, we see this as covering such important decision making events as joining; transferring; dealing with divorce; consideration of PIE exercises etc as well as what you can do when you have chosen to crystallize some/all of your pension. Look out for more on this qualification (and others on the PMI website www.pensions-pmi.org.uk). Other PMI plans Clearly, one of the major talking points of the past few months has been PMI s decision to call off the potential merger discussions with the NAPF in January. The reasons for ceasing these talks were set out in the press release at the time so I will not comment further here. However, it was clear from feedback at the time just how highly the industry rated what PMI had set up within its overall educational programme, most specifically an ever expanding range of qualifications but also a good range of technical events and a variety of Continuing Professional Development (CPD) initiatives. This year, we introduced our Fellowship Network discussion forums and held three initial events in London, Birmingham and Edinburgh to discuss the new world of retirement savings. More events will be held in the summer. This initiative is to enable a far greater interaction with PMI Fellows that goes beyond Council engagement and seeks to involve more of them in feeding through ideas on how PMI should lead or react to the key topical pensions issues. Paul Couchman PMI President However, PMI has been working on a Certificate in Pension Scheme Member Guidance (with our qualification development partner for this project, JLT) and expect to be able to confirm the final syllabus shortly. This covers a much broader spectrum of a pension scheme member s life cycle (and choices) than One such issue is how PMI can engage with people to more readily embrace careers in pensions at school leaver stage. We have been part of the Workplace Pensions Trailblazer initiative developed by Department of Business Innovation and Skills (DBIS) and enlisted the support of more than a dozen key ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 3

employers in the pensions industry to draft the high level standard which has now been agreed and published hopefully, the second and final phase will be completed by the end of June. This will then establish the detailed standard and assessment criteria for an apprenticeship in workplace pensions that allows for administration and consultancy options within it. Another project planned for launch in the summer, ahead of examination in October is the new qualification: Certificate in DC Governance. This will help to establish standards in this area and the syllabus will cover the latest requirements, regulation, controls, management and governance structures for DC pensions. Again full details will be on the website. The PMI is also engaged in discussions with the Association of Professional Pension Trustees (APPT) to see if there should be a specialist qualification for those who have a career as an independent, professional trustee. Again, watch this space. We have seen a continuing interest in trustee boards looking to sign up en bloc to the voluntary PMI CPD scheme for trustee boards and more initiatives are planned for working with OPDU, the Occupational Pensions Defence Union, in this area as well as other potentially interested bodies. The list of people in particular who volunteer their services to the PMI, as Council members, tutors, examiners, verifiers, speakers, authors and those on regional groups who continue their selfless assistance to the PMI is a tribute to how our Institute continues to reap the benefits of such dedication at a time when work constraints and demands have never been more challenging. My sincere thanks go to you all. Finally, I would like to say a special thank you to my fellow Board members and the staff at PMI House for all their efforts and support in my two years as President. I will end by inviting as many Members as can make it to the PMI Annual General Meeting on Thursday 9 July commencing at 5.30pm at the offices of Burges Salmon, 6 New Street Square, London EC4A 3 BF. My thanks go to I was fortunate enough to be President at another excellent PMI Dinner when continuing the sporting tradition of Olympian, Colin Jackson, last year we had ex World Cup referee, Howard Webb, this year. Seeing the range of companies represented this year, some returning for the umpteenth year, others coming for the first time, it continues to impress me that PMI continues to associate and involve itself with the key decision makers in our industry. 4 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

Report of the directors For the year ended 31 December 2014 The directors present their report and the audited financial statements for the year ended 31 December 2014. Reference and administrative information set out on page 2 forms part of this report. The financial statements comply with the current statutory requirements and the memorandum and articles of association. Structure, governance & management The Institute is a company limited by guarantee, incorporated on 12 October 1977. It was established under a memorandum of association which established its objects and powers and is governed under its articles of association. Its commercial activities are undertaken by a trading subsidiary PMI Services Ltd, and together they are referred to as the group. The Institute is governed through the following structure: An Advisory Council This consists of 16 Fellows of the Institute elected in accordance with the Articles of Association. Its role is to: n Advise on the strategic direction of the Institute n Provide technical input and expertise on industry issues n Act as ambassadors for the Institute Honorary Officers These are elected by and from the Council and comprise the President and two Vice Presidents. The Board The management of the Institute is vested in the Board of directors consisting of: n The President and 2 Vice-Presidents of the Institute n The Chief Executive of the Institute n The Finance Director of the Institute n Two Members co-opted by the Board The Board has full responsibility for the conduct of the business and affairs of the Institute. A large number of Committees have been established by the Board which each have defined terms of reference and authority. The principal Committees are: The Audit and Risk Committee The Committee ensures the maintenance of a risk register and provides assurances on the effectiveness of PMI s risk management, on a quarterly basis to the Board, on all compliance matters, business strategy implementation and operational business continuity. The Committee also liaises closely with the external auditors and recommends the Annual Accounts for approval by the Board. Membership Committee The Committee is responsible for determining the requirements and benefits for each class of member and for ensuring the systems and procedures are in place to deliver them. It is also responsible for the implementation and operation of the Continuing Professional Development (CPD) scheme and encouraging and supporting the PMI Regional groups. The Committee also supports the Trustee Group and works closely with other affiliated groups. Professional Standards Committee The Committee ensures that PMI continues to meet the needs and aspirations of its members and the industry by monitoring and advising the Board on the establishment and development of professional qualification and post qualification standards and policies. In particular, it is responsible for developing appropriate educational and professional standards amongst members for the benefit of the wider pensions industry. In doing so, it will liaise with other relevant external, regulatory and professional bodies. It is supported by other committees as necessary. The Committee is comprised of representatives from PMI Council members who serve on PMI s main governance committees, PMI members who are not members of PMI Council as well as independent members and is usually chaired by a past President of PMI. Independent and non PMI Council members account for the majority of Committee members. Qualifications, Examinations and Assessment Committee The Committee develops and maintains PMI strategy for all qualifications and examinations and assessments. In particular it sets, reviews and monitors all procedures to ensure examinations are conducted fairly and pass marks validly and appropriately set. Where relevant it ensures that all qualifications meet the requirements of Ofqual, the qualifications regulator. The Committee is able to ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 5

discharge its responsibilities only through the work of dedicated subcommittees and a large team of examiners and assessors drawn from PMI members and supporters.. PMI Governing Body (Ofqual) The Committee is responsible for supervising the PMI s obligations to the qualifications regulator Ofqual. It comprises the PMI Board, the Ofqual Responsible Officer and Senior Officers and an independent member, currently the Chair of QEAC. It is supported by QEAC. Commercial Development Committee The Committee is responsible for the development of the programme of PMI s Conferences and Events together with the oversight of all sponsorship and partnering activity. The Committee is also responsible for the content of PMI News through its PMI Media subcommittee and for the maintenance of PMI TV and the PMI activity within the Pensions Careers website. PMI Accredited Adviser Programme (PMI AAP) The Committee is responsible for the operation and performance of the PMI AAP. It also ensures PMI s obligations to the FCA in respect of the PMI AAP are met and this includes commissioning the annual audit report for the FCA. The programme includes the issue of Statements of Professional Standing, the verification of qualifications and CPD activity. The Committee is supported by PMI Staff, the Membership Committee and any disciplinary sub-committees that may be necessary. Principal Activities and Future Developments The Pensions Management Institute s principal activities are the maintenance of professional standards and the provision of tuition and examination facilities, conferences, seminars and acting as a forum for ideas and information on all aspects of the management of pension schemes. The objectives of the Institute include educating people about the provision of pensions and other relevant benefits and in continuing guidance throughout their careers. The Institute also plays a prominent role as one of the leading industry bodies which considers and responds to Government initiatives and proposals on pension matters. Results and Dividends The Institute made a net surplus for the year before tax of 133,201 compared with 334,364 in 2013. The Institute, according to its Memorandum of Association, may not make payment of a dividend. After transfers of 50,000 (2013: 972,000) to other reserves and a recognised actuarial loss of 16,412 (2013: 95,000) in the Pension Scheme, the retained surplus of 46,094 (2013 deficit: 755,649) has been transferred to the accumulated fund resulting in a balance of 526,523 (2013: 480,429) at 31 December 2014. In addition a Pension Scheme Deficit Reserve is held which amounts to 1,000,000 (2013: 1,000,000) created to fund the deficit within the scheme. Directors The directors who served during the year and up to the date of this report were as follows: Paul Couchman Susan Smith Resigned 10 July 2014 Gerry Degaute Kevin LeGrand Appointed 10 July 2014 Lesley Alexander Appointed 19 November 2014 Robert Branagh Appointed 19 November 2014 Vince Linnane Brian Murkin Directors qualifying for third party indemnity provisions The company has granted indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provision remains in force as at the date of approving the report of the directors. Statement of responsibilities of the directors The directors are responsible for preparing the report of the directors and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting 6 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Institute and the group and the income and expenditure of the group for that period. In preparing these financial statements the directors are required to: n select suitable accounting policies and then apply them consistently; n make judgments and estimates that are reasonable and prudent; n state whether applicable UK Accounting Standards and statements of recommended practice have been followed, subject to any material departures disclosed and explained in the financial statements; and n prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Institute will continue in operation. Members of the Institute guarantee to contribute an amount not exceeding 1 to the assets of the company in the event of a winding up. The total number of such guarantees at 31 December 2014 was 5,087 (2013-4,988). Some of the directors are members of the Institute but this entitles them only to voting rights. The directors have no beneficial interest in the group or the Institute. Auditors Sayer Vincent LLP were reappointed as the Institute's auditors during the year and have expressed their willingness to continue in that capacity. The report of the directors has been prepared in accordance with the special provisions applicable to companies subject to the small companies' regime. Approved by the directors on 15 April 2015 and signed on their behalf by Paul Couchman Director. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Institute's transactions and disclose with reasonable accuracy at any time the financial position of the Institute and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Institute and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Institute's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the directors confirms that to the best of his or her knowledge there is no information relevant to the audit of which the auditors are unaware. Each of the directors also confirms that he or she has taken all necessary steps to ensure that he or she is aware of all relevant audit information and that this information has been communicated to the auditors. ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 7

Independent auditors report to the members of The Pensions Management Institute We have audited the financial statements of Pensions Management Institute for the year ended 31 December 2014 which comprise the group income and expenditure account and the group and Institute's balance sheets and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the Institute's members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company s members those matters we are required to state in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Institute and the Institute's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditor As explained more fully in the statement of responsibilities of the directors set out in the report of the directors, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board s Ethical Standards for Auditors Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the report of the directors to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion the financial statements: n give a true and fair view of the state of the group s and of the Institute s affairs as at 31 December 2014 and of the group s results for the year then ended; n have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; n have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the report of the directors for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: n adequate accounting records have not been kept by the Institute, or returns adequate for our audit have not been received from branches not visited by us ; or n the Institute's financial statements are not in agreement with the accounting records and returns; or n certain disclosures of directors remuneration specified by law are not made; or n we have not received all the information and explanations we require for our audit; or n the directors were not entitled to take advantage of the small companies exemption in preparing the report of the directors. Helen Elliott (Senior statutory auditor) Date: 21 April 2015 Sayer Vincent LLP, Statutory Auditors Invicta House, 108 114 Golden Lane, London,EC1Y 0TL 8 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

Consolidated income and expenditure account For the year ended 31 December 2014 Total Total Notes Income Annual subscriptions, election and registration fees 2 906,530 861,704 Study support, examination and course fees 3 873,221 1,057,978 Expert partner sponsorship 218,925 175,233 Conferences and seminars 182,005 224,612 Annual dinner income 83,230 70,508 Recruitment advertising 55,175 69,414 Rent Receivable 43,500 47,493 Miscellaneous 4 5,363 3,394 2,367,949 2,510,336 Expenditure Secretariat 6 1,027,927 997,421 Membership newsletter and other services 174,957 196,571 Study support, examination & course expenditure 7 134,284 134,731 Conferences and seminars 73,766 72,945 Annual Dinner expenditure 56,563 48,896 Establishment costs 8 308,279 312,981 Administration costs 9 140,468 120,599 Marketing costs 17,610 30,597 Professional fees 168,353 139,126 IT and equipment hire & maintenance 10 117,497 115,100 Depreciation of assets 12 43,921 34,912 2,263,625 2,203,879 Operating surplus 104,324 306,457 Interest receivable 28,877 27,907 Surplus before taxation 133,201 334,364 Taxation 11 20,695 23,013 Net surplus for the year 17 112,506 311,351 Transfer (to) / from other reserves 18 (50,000) (972,000) Actuarial loss recognised in the pension scheme 19 (16,412) (95,000) Total recognised gains/(losses) for the year 46,094 (755,649) Accumulated fund brought forward 480,429 1,236,078 Accumulated fund carried forward 526,523 480,429 All of the above results are derived from continuing activities. There were no other recognised gains or losses other than the net result for the year. Movements in funds are disclosed in notes 17 and 18 to the financial statements. ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 9

Balance sheets As at 31 December 2014 Group Institute Notes Fixed assets Tangible assets 12 228,563 94,933 228,563 94,933 Investments in subsidiary undertakings 13 6 6 228,563 94,933 228,569 94,939 Current assets Debtors 14 325,780 300,561 117,767 142,934 Cash on deposit 2,031,004 1,622,833 2,031,004 1,622,833 Cash at bank and in hand 15 202,007 746,778 5,558 311,341 2,558,791 2,670,172 2,154,329 2,077,108 Creditors: amounts due within one year Creditors and deferred income 16 1,060,831 1,134,676 1,368,149 1,218,765 Net current assets 1,497,960 1,535,496 786,180 858,343 Net assets (excluding pension liability) 1,726,523 1,630,429 1,014,749 953,282 Pension Liability 19 Net Assets (including pension liability) 1,726,523 1,630,429 1,014,749 953,282 Reserves Accumulated Fund 17 526,523 480,429 (185,251) (196,718) IT Development Fund 18a 50,000 50,000 50,000 50,000 Refurbishment and Repair Fund 18b 150,000 100,000 150,000 100,000 Pension Scheme Deficit Repair Fund 18c 1,000,000 78,000 1,000,000 78,000 1,726,523 1,630,429 1,014,749 953,282 Approved by the directors on 15 April 2015 and signed on their behalf by Paul Couchman - Director 10 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

Notes to the financial statements For the year ended 31 December 2014 1. Accounting policies The following accounting policies have been adopted in the preparation of these financial statements which have been prepared in accordance with applicable UK Accounting Standards. A) Accounting convention The financial statements have been prepared under the historical cost convention. The group is exempt from the requirement to prepare a cash flow statement as it qualifies as a small group. B) Consolidation The financial statements contain information about the company and its trading subsidiary. No separate income and expenditure account is presented for the parent company as permitted by s.408 of the Companies Act 2006.. C) Income i) Annual subscriptions and election fees Subscriptions credited to the Income and Expenditure Account represent subscriptions receivable for the accounting year covered by these financial statements. The proportion of annual subscriptions received in the year relating subsequent periods are treated as subscriptions received in advance and accordingly no credit is taken in the current year's Income and Expenditure Account. Election and registration fees credited in the Income and Expenditure Account represent the amounts received from members upon election or registration. ii) Examination fees Examination fees are recognised in the year in which the exam is sat. iii) Tuition fees Tuition and revision courses and packages take place over a variety of short set and flexible timescales and income is recognised when earned. iv) Sponsorship Expert partner sponsorship is recognised over the life of the contract where sponsorship is for a set time period. v) Conferences and seminars Delegate and sponsor income is recognised in the year in which the event takes place. vi) Annual dinner income Income is recognised in the year in which the dinner takes place. vii) Recruitment advertising Income is recognised in the year of publication of the advertisements. viii) Rental income Rental income is recognised in the year to which it relates. ix) Interest receivable This represents the gross interest received and receivable. D) Expenditure Expenditure incurred by the Pensions Management Institute for writing tuition material forming part of the future syllabus is written off in the year incurred. All other expenditure is recognised in the year that the related goods or services are delivered. E) Depreciation Depreciation has been charged in the financial statements so as to write off the following classes of fixed assets on the basis and rates shown below: Office furniture and equipment Computer equipment 20% on cost per annum 20% on cost per annum Items of equipment are capitalised where the purchase price exceeds 1,000. Assets are reviewed for impairment if circumstances indicate their carrying value may exceed their net realisable value and value in use. F) Format and content of accounts The format of the Financial Statements have been adapted and re-arranged from the prescribed formats in the Companies Act 2006 to provide a more meaningful presentation of the Institute's activities in the year. In all other respects, the form and content of the accounts are in accordance with the requirements of the Act. G) Operating lease agreements Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged against profits on a straight line basis over the period of the lease. H) Taxation Corporation tax due on profits chargeable to corporation tax are accrued in the year to which they relate. I) Pension scheme The Institute operates both a stakeholder scheme and a defined benefit scheme. The defined benefit scheme provides benefits based on the final pensionable salary, and the Institute accounts for its pension costs in accordance with the requirements of FRS 17. These details are given at note 19. Costs for the stakeholder scheme are recognised in the year that monthly contributions are made. ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 11

2. Annual subscriptions, election and registration fees Total Total Fellows 226,457 227,766 Associates 302,600 282,332 Diploma Members 128,971 135,827 Certificate Members 5,987 5,760 Students 120,288 93,821 Affiliates 45,804 31,811 Retired Members 34,873 42,617 Trustee Group Income 41,550 41,770 906,530 861,704 3. Study support, examination and course fees Total Total Study support fees 376,619 471,393 Examination and exemption fees 481,635 554,247 Revision course fees 14,967 32,338 873,221 1,057,978 4. Miscellaneous income Total Total Sale of publications 1,409 2,770 Miscellaneous 3,954 624 5,363 3,394 5. Operating surplus This is stated after charging : Depreciation 43,921 34,912 Directors remuneration 188,579 179,032 Auditors remuneration: n Audit 11,400 11,175 n Other services 7,550 6,800 Operating lease rentals: n Property 150,000 150,000 n Other services 9,112 8,972 12 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

6. Secretariat Total Total Salaries 802,480 803,166 Social security contributions 86,556 89,136 Other pension contributions 54,389 49,192 Contract and temporary staff 38,630 33,549 Training 16,897 9,272 Other staff costs 28,975 13,106 1,027,927 997,421 The average weekly number of employees (full-time equivalent) during the year was as follows: No No Corporate 6.0 6.6 Membership 2.2 2.9 Commercial Development 3.0 3.0 Education 7.1 6.6 18.3 19.1 7. Study support, examination and course expenditure Examination expenses 100,951 103,821 Tuition expenses 27,530 17,821 Revision course expenses 5,803 13,089 134,284 134,731 8. Establishment expenses Rent and rates 194,008 200,750 Insurance 14,388 14,478 Heating and lighting 29,864 34,772 Maintenance and repairs 33,259 29,568 Cleaning 17,127 17,940 Catering 19,633 15,473 308,279 312,981 9. Administration expenses Printing and stationery 48,253 33,618 Telephone 14,130 15,796 Postage 53,820 51,665 Travel 24,265 19,520 140,468 120,599 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 13

10. IT and equipment hire and maintenance Computer software and maintenance 105,465 103,859 Hire of photocopiers 12,032 11,241 117,497 115,100 11. Taxation UK corporation tax Based on the profit for the year 20,695 23,013 12. Fixed assets The Group and Institute Furniture Computer and equipment equipment Total Cost At the start of the year 77,506 327,412 404,918 Additions in year - 177,551 177,551 At the end of the year 77,506 504,963 582,469 Depreciation At the start of the year 75,106 234,879 309,985 Charge for the year 600 43,321 43,92 At the end of the year 75,706 278,200 353,906 Net book value At the end of the year 1,800 226,763 228,563 At the start of the year 2,400 92,533 94,933 13. Investments in subsidiary undertakings Institute At start and end of the year 6 6 The investment is equally in three companies. PMI Services Ltd which undertakes the commercial activities of the group, including sponsorship, seminars and conferences, PMI Trustee Ltd in relation to the Institute's pension scheme (dormant) and PMI Ltd, which is dormant. 14 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

14. Debtors Group Institute Trade debtors: Newsletter Advertising 18,706 15,510 Dinner 22,695 9,484 Sponsorship 91,200 32,100 Other 81,264 35,161 59,004 9,097 213, 865 92,255 59,004 9,097 Sundry debtors: Staff season ticket loans 4,501 11,506 4,501 11,506 Other 4,600 2,950 4,600 2,950 9,101 14,456 9,101 14,456 Prepayments and accrued income: Rent and rates 34,583 33,266 Annual Dinner 11,439 40,757 PMI TV 48,000 48,000 Other prepayments 43,371 48,568 36,241 48,122 Accrued Income 13,421 23,259 13,421 23,259 102,814 193,850 49,662 119,381 Total debtors 325,780 300,561 117,767 142,934 15. Cash at bank and in hand Group Institute Bank current accounts 180,826 570,527 (15,623) 135,090 Bank deposit accounts 20,928 176,119 20,928 176,119 Cash in hand 253 132 253 132 202,007 746,778 5,558 311,341 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 15

16. Creditors (amounts falling due within one year) Group Institute Trade creditors: Other 45,703 96,438 43,637 96,145 45,703 96,438 43,637 96,145 Deferred income: Subscriptions received in advance 548,768 554,330 548,768 554,330 Exam income received in advance 45,743 109,253 45,743 109,253 Sponsorship received in advance 155,332 115,494 Rent received in advance 9,391 9,323 Dinner income received in advance 49,115 48,750 Conference and seminar income received in advance 17,076 7,443 17,076 825,425 844,593 611,587 663,583 Corporation tax payable 20,718 23,036 11,969 5,581 Other creditors 118,759 134,717 117,081 135,030 Other taxes and social security 50,226 35,892 50,226 35,892 Amounts owing to subsidiary company 533,649 282,534 189,703 193,645 712,925 459,037 Total creditors 1,060,831 1,134,676 1,368,149 1,218,765 17. Accumulated fund Group Institute At 1 January 480,429 1,236,078 (196,718) 628,660 Surplus for the year 112,506 311,351 77,879 241,622 Transfer (to) / from other reserves (50,000) (972,000) (50,000) (972,000) Actuarial loss on pension scheme (16,412) (95,000) (16,412) (95,000) At 31 December 526,523 480,429 (185,251) (196,718) 16 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

18a. IT development fund Group Institute At 1 January 50,000 50,000 50,000 50,000 Transfer from Income and Expenditure At 31 December 50,000 50,000 50,000 50,000 18b. Refurbishment and repair fund Group Institute At 1 January 100,000 50,000 100,000 50,000 Transfer from Income and Expenditure 50,000 50,000 50,000 50,000 At 31 December 150,000 100,000 150,000 100,000 18c. Pension scheme deficit repair fund Group Institute At 1 January 1,000,000 78,000 1,000,000 78,000 Transfer from Income and Expenditure 922,000 922,000 At 31 December 1,000,000 1,000,000 1,000,000 1,000,000 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 17

19. Pension scheme The Institute operates both a stakeholder scheme and a defined benefit (DB) scheme. The following relates to the DB scheme only. The DB scheme is a separate trustee administered fund holding the pension scheme assets to meet long term liabilities. A full actuarial valuation was carried out at 30 June 2011 and updated to 31 December 2014 by a qualified actuary, independent of the scheme's sponsoring employer. The major assumptions used by the actuary are as shown below. The Institute paid 16,412 towards scheme management and administration expenses incurred in 2014. These contributions are consistent with the Schedule of Contributions in place. Present values of scheme liabilities, fair value of assets and surplus (deficit) 000s 000s Fair value of scheme assets 3,654 3,248 Present value of scheme liabilities (3,233) (2,488) Surplus (deficit) in scheme 421 760 Unrecognised surplus (421) (760) Deferred tax Net asset (liability) to be recognised The asset in the scheme has been restricted to zero in the balance sheet because the Institute is unable to benefit from reduced contributions in the future as there is no future accrual of benefits. Reconciliation of opening and closing balances of the fair value of the scheme liabilities 000s 000s Scheme liabilities at start of period 2,488 2,488 Current service cost Interest cost 114 119 Contributions by scheme participants Actuarial losses (gains) 631 (108) Benefits paid, death in service premiums & expenses Past service costs Liabilities assumed in a business combination Losses (gains) on curtailments (11) Liabilities extinguished on settlements Scheme liabilities at end of period 3,233 2,488 18 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

19. Pension scheme (continued) Reconciliation of opening and closing balances of the fair value of the scheme assets 000s 000s Fair value of scheme assets at start of period 3,248 3,058 Expected return on scheme assets 114 108 Actuarial gains (losses) 276 (13) Contributions by employer 16 95 Contributions by scheme participants Benefits paid, death in service premiums & expenses Assets acquired in a business combination Assets distributed on settlements Fair value of scheme assets at end of period 3,654 3,248 The actual return on scheme assets over the period ending 31 December 2014 was 390,000. Total expense recognised in profit and loss account 000s 000s Current service cost Interest cost 114 119 Expected return on scheme assets (114) (108) Effect of limit on account of surplus recognised due to some of the surplus not being recognisable Past service cost Losses (gains) on curtailments (11) Losses (gains) on settlements Total expense recognised in profit and loss account Statement of total recognised gains and losses 000s 000s Actual return less expected return on pension scheme assets 276 (13) Experience gains and losses arising on the scheme liabilities Changes in assumptions underlying the present value of the scheme liabilities (631) 108 Total recognised before adjustment for recoverability (355) 95 Surplus in scheme not recoverable 339 (190) Total recognised in statement of recognised gains and losses (16) (95) The cumulative amount of actuarial gains and losses recognised in the statement of total recognised gains and losses since adoption of FRS17 is a loss of 720,000. ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 19

19. Pension scheme (continued) Assets 000s 000s Equities 1,028 940 Bonds 1,494 1,227 Cash 17 With profits 1,132 1,064 Total assets 3,654 3,248 None of the fair values of the assets shown above includes any of the Institute's own financial instruments or any property occupied by, or other assets used by, the Institute. Assumptions % p.a. % p.a. Rate of discount 3.60 4.60 Inflation (RPI) 3.30 3.70 Inflation (CPI) 2.30 2.70 Allowance for revaluation of deferred pensions of CPI or 5% p.a. if less 2.70 2.70 Allowance for pension in payment increases of RPI or 5% p.a. if less 3.30 3.70 Allowance for commutation of pension for cash at retirement 75% of post A day 75% of post A day The mortality assumptions adopted at 31 December 2014 imply the following life expectancies: Life expectancy at age 65 (years) Male retiring in 2014 22.2 Female retiring in 2014 24.5 Male retiring in 2034 24 Female retiring in 2034 26.4 Expected long term rates of return The long-term expected return on bonds is determined by reference to UK dated government yields at the balance sheet date. The long-term expected rate of return on equities is based on the rate of return on bonds with an allowance for out-performance. The long-term expected return on the With Profits policy is determined by reference to long dated government bond yields with an allowance for out-performance in part of the assets in relation to the underlying asset split. 20 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

19. Pension scheme (continued) The expected long term rates of return applicable at the start of each period are as follows: Period commencing Period commencing 1 Jan. 2014 1 Jan. 2013 % p.a % p.a Equities 7.00 5.80 Bonds 3.50 2.30 Cash 3.00 1.70 With Profits 4.80 3.60 Overall for scheme 4.94 3.74 Amounts for the current and previous four years 2012 2011 2010 000s 000s 000s 000s 000s Fair value of scheme assets 3,654 3,248 3,058 2,640 2,526 Present value of scheme liabilities 3,233 2,488 2,488 2,545 2,102 Surplus (deficit) in scheme 421 760 570 95 424 Experience adjustment on scheme assets 276 (13) 221 (92) 100 Experience adjustment on scheme liabilities 56 (12) 27 The best estimate of contributions to be paid by the Institute to the scheme for the period commencing 1 January 2015 is 17,000. 20. Related party transactions The group has taken advantage of the exemptions conferred under FRS 8 not to disclose transactions between group companies which are eliminated on consolidation. 21. Members' Funds and Memorandum of Association The company is limited by guarantee and has no issued share capital. Every member, in accordance with Clause 6 of the Memorandum and Articles of Association, undertakes to contribute a sum not exceeding 1 in the event of the company being wound up whilst they are a member or within one year after they cease to be a member. ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 21

22. Commitments under operating leases Group Institute Operating leases which expire: Office equipment Within 2 to 5 years 9,112 8,972 9,112 8,972 Land and buildings Within 2 to 5 years 150,000 150,000 159,112 158,972 9,112 8,972 22 ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014

Theprize fund The fund is administered by The Pensions Management Institute; it does not form part of the assets and liabilities of the Institute in the financial statements on the previous pages. At 1 January 2014 16,306 16,793 Donations received 250 250 Deposit interest 14 13 16,570 17,056 Prize awards in year (1,650) (750) At 31 December 2014 14,920 16,306 Represented by: Cash at bank 19,520 19,256 Due to PMI (4,600) (2,950) 14,920 16,306 Accountants report on the prize fund We have reviewed, without carrying out an audit, the Prize Fund Statement set out above for the year ended 31 December 2014, which is consistent with the books and records maintained and with the information and explanations supplied to us. Sayer Vincent LLP Chartered Accountants Invicta House 108 114 Golden Lane London EC1Y 0TL ANNUAL REPORT AND FINANCIAL STATEMENTS 2014 For the year ended 31 December 2014 23

PMI House 4-10 Artillery Lane London E1 7LS T: 020 7392 7427 F: 020 7375 0603 W: www.pensions-pmi.org.uk